Unemployment picture continues to worsen

15.10.2020 - 10:33
Mynd með færslu
 Mynd: Bragi Valgeirsson - RÚV
The unemployment rate in Iceland was nine percent in September—up by half a percent since August, according to Vinnumálastofnun (Directorate of Labour) data. The rate is expected to continue to grow in the short term; to a possible 10.6 percent by December.

18,443 people were receiving unemployment benefit in the general benefits system at the end of September, and 3,319 were on top-up benefits.

The unemployment rate among non-Icelandic citizens in Iceland is 20 percent. Around half of those people are from Poland, and a large proportion of the rest are from Lithuania and Latvia. 

As previously, the unemployment rate is significantly higher in Suðurnes than any other region—where it also grew the fastest between months. Unemployment on Suðurnes stands at 18.6 percent. Vinnumálastofnun predicts the rate in the region will rise to 19.8 percent in November and 21.9 percent in December. 

The second-highest rate is in the capital region: 9.2 percent—though that had grown by just 0.3 percent since August. A higher proportion of jobseekers are women in all regions except the capital. 

Data indicates that unemployment has increased in all industries compared to September 2019, but none more so than travel services, such as accommodation, catering, and transport services. The increase was smallest in education, health, social services, fisheries, retail, and IT/communications. 

Unnur Sverrisdóttir, director of Vinnumálastofnun, says: “It’s just this virus. The tourism industry is completely frozen again and a domino effect is being seen in the seven or eight months since this situation began. More and more are giving up. That’s the main explanation for this.” She adds: “Then there’s the disappearing summer jobs, and fewer construction projects. The Icelandic employment market has always shrunk in the wintertime.” 

It is believed some 5,000 people have been looking for work for more than six months, and 2,000 for a whole year. It is still believed that unemployment will drop quickly when the pandemic finally ends. 

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Alexander Elliott
Project manager
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